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The End of Sprawl As We Know It...NOT

As the housing market collapsed and gasoline prices spiked in 2007, many planners may have read Cornell University law professor Eduardo Penalver's essay in the Washington Post with more than a little satisfaction. "But if there is consolation to be found amid the rubble [of the housing crisis]," professor Penalver wrote, "it may be that the inexorable spreading out that has characterized American life since World War II might finally be coming to an end."

This wish, however, is based on two highly suspect premises: The quest for larger homes and more land is based on transient and opportunistic desires, and long-run housing choices are constrained by current transportation technologies. Both premises are false, and ignoring them will fundamentally compromise attempts to: 1) build new cities, and 2) revitalize our existing ones. Do to length constraints, however, I'm going to focus on the first problem in this blog post.

Despite conventional wisdom, decentralization and suburbanization are not unique to the United States or, for that matter, the post-World War II period. These trends are well established in the urban (if not planning) literature, and useful historical summaries can be found in architectural historian Robert Bruegmann's Sprawl: A Compact History, urban analyst Joel Kotkin's City: A Global History (Modern Library, 2005), and economist William T. Bogart's Don't Call It Sprawl: Metropolitan Structure in the Twenty-First Century. They are part of the long wave of urban development as higher incomes allow families to buy and move into homes that had more rooms, more bedrooms, more bathrooms, open floor plans, garages and private yards. Older cities, often built on a supply of tenement housing to feed rapid population and employment growth, simply didn't have large supplies of new housing. The five and seven floor "walk ups" often housed four or more families per floor, had poor ventilation, few windows, and little access to open space. Newly developed suburban tract housing provided a meaningful alternative. More importantly, these housing characteristics that make suburbs attractive are still valued in the marketplace.

Economists use "hedonic" pricing models to tease out the features of a home that are more (or less) valued by consumers. The idea is to break down the components of a home's value by its specific characteristics, including square footage, lot size, number of bedrooms, bathrooms, and other amenities (e.g., swimming pools, garages, etc.). While not without criticism, these methods provide a reliable quantitative approach to figuring out what the average or "typical" housing consumer values if results are consistent across different cases and studies.

A review of dozens of econometric hedonic studies over the past decade by Florida State University economists G. Stacy Sirmans and David Macpherson found that the lot size, number of bathrooms, home square footage, and even the presence of a swimming pool significantly increased home value. More strikingly, of the 64 studies that have examined the influence lot size has on home value, 54 found a positive relationship: as lot size increased, home value increased. Ten studies found no statistically significant impact. None of the studies found a negative relationship. In other words, the housing consumers consistently and persistently valued larger lots in their choice over new home purchases.

Meanwhile, of the 78 studies that included the age of a home, the effect was negative in 63 cases, positive in seven, and had no effect in eight studies. Since older cities tend to have older homes with fewer of the characteristics contemporary buyers want-more bedrooms, bathrooms, etc.-traditional cities have trouble competing in the housing market.

The takeaway for planners and planning is that attracting households to older cities is an uphill battle. Rejuvenating existing and older neighborhoods requires allowing the real-estate market to adjust to fit the styles and preferences of contemporary families. In the words of current president of the Congress for the New Urbanism and former Milwaukee Mayor John Norquist in his insightful and readable book The Wealth of Cities: Revitalizing the Centers of American Life(p. 196). Developers and builders in older cities "can't take the attitude that people should live in the city because it's the right thing to do, nor can they pin their hopes strictly on historical appeal. City homes need the amenities people want."

This doesn't mean older cities must try to replicate suburban (or ex-urban) housing. On the contrary, most older neighborhoods and cities can't (and shouldn't). Rather, the research implies that cities must focus on offsetting the negative effects of smaller yards and more dense living with high-value urban amenities that compensate for the features consumers want but can't get in these environments.

Of course, this is easier said than done. Urban neighborhoods are inherently more complex because they must juggle mixed uses, multiple transportation modes and higher densities, attempting to find a combination that will satisfy fickle consumer demand. The complexity of urban redevelopment projects and infill-development inalready built-up cities-demands a nimble, flexible and expeditious regulatory process to minimize development costs and allow the market to adapt quickly to more finely grained tastes for housing. One of the chief tasks facing planners is developing and applying streamlined zoning and development controls that accommodate this kind of development to replace the cookie-cutter planning and zoning procedures that more typically impose a cumbersome, uncertain and inefficient approval process on land use and redevelopment decisions.

Sam Staley is Associate Director of the DeVoe L. Moore Center at Florida State University in Tallahassee.

Comments

Comments

consolidating households means multiplying choices

The housing bubble, driven by real estate speculation in the easy credit era and great public sector incentives, was handy for returning to the urban center...but now what? We have entered the era of shortselling...and your question is very valid, what is going to drive development for the urban option? Amenities? Surely more than that. We are more connected to one another today than we were just a year ago, and that trend will not stop in the age of Facebook and the iphone.

Urbanist development will take advantage of the need for households to consolidate and to have the local assets, attractive and wired infrastructure and multi-modal travel options (that many cities thankfully got started before the collapse of the condominium boom). Once we start pulling out of the cycle of shortselling, the next wave of development is going to be very sensitive to the need to locate in areas with these diverse resources readily at hand. That means walkable centers, physical assets finely tuned to the wireless ones, with easy proximity to transit & zipcars, nearer to employment centers, multiple entertainment options, active parks, gyms, greenway trails, grocery stores, urban Targets and so on. We will see more and more multi-generational households , and more and more singles rooming together in souped up single-families and townhomes, with, you are right, the amenities. But these are shared amenities. The way people will get to these amenities, in the era of Ning, is by sharing them, in the urban center, in the neighborhood/living group, in the household, ...which shall be more variform than ever. Urban centers are simply more amenable and adaptable to the consolidated benefits social networks open up.

The Invisible Hand

I have started on the previous thread, "Vancouver Olympics A Living Laboratory", on a mission of alerting planners to the way that land prices react to regulatory distortions of supply, particularly by way of urban limits. I will not multiply words here; please visit the previous thread. The discussion has developed to include a lot of of angles.

What you omit from your reckoning in your assessment above about all these people who will apparently find their living solutions in the inner urban area; is the asking price for houses and accomodation in those areas. The very people who you want to live in those areas, simply cannot afford it. It is not just developers and NIMBY-ists who are obstructing high density inner urban area development, it is the old "invisible hand" of the market coming back to thwart your good intentions.

The very reason that developers are keen on high-end redevelopment in the inner urban areas, is that the land prices are so high that the resulting development will be priced out of the reach of all except the wealthy buyers who are looking for exclusivity.

None of this applies to the relatively unregulated cities of the Southern and Central US States. In those cities, you will find, along with "sprawl", exactly the sort of high density inner area development you want. Because there are fringe lots for $30,000, there are inner area lots for $300,000. But when the fringe lots are $300,000, the inner area lots are $3,000,000. This is the simple result of land markets working normally.

What end prices are going to result if you split a $300,000 lot into 2 or 3 or 6 or 20 units; and what home prices are going to result if you split a $3,000,000 lot the same number of ways?

The books and the authors that Samuel Staley recommends are good, but Colin Clark, in "Population Growth and Land Use", pointed out way back in 1967, that densification and sprawl go along together. Stop the sprawl, and you stop the densification as well.

Actually, Colin Clark did not predict the following, but Alain Bertaud has identified that the "densification" actually starts to occur AWAY from the inner urban area as a result of pent-up demand for the most affordable accomodation come what may.

Invisible Hand needs recognition, sorry

As I argued on the previous thread, urban land prices react strongly to regulations like urban limits, and in ways that actually negate the intention of the regulations. This guy from Portland appears to have come to some similar conclusions to me.

Histories of urban development, such as those of Colin Clark and Robert Bruegmann, and papers like those of Donald Glover and Julian Simon and Alain Bertaud, reveal some important facts. One is that no dense urban center has ever formed without sprawl surrounding it. Another important fact is that the eventual density of the urban center is strongly determined by the number and the capacity of roads originally provided by planners.

Manhattan would never have come into being without the sprawl surrounding it, and without the elaborate roading network with which it was originally provided. There is an obvious correlation, so that where metro areas have stubbornly refused to densify to a similar extent to Manhattan in spite of surrounding sprawl, the reason is a shortage of roads; what is more, in most areas, this is too late to address due to incumbency. The irony is, that if you want to create a highly dense urban area in which public transport use is high and economically sustainable, the evidence is that you need to 1) provide roads 2) allow sprawl and 3) wait many decades.

Attempting to create density with weak regulatory tools that fall short of outright totalitarianism are doomed to failure. And even the previous experiments imposed on society by outright totalitarian regimes should teach us a lesson about the alleged efficiency of high density and mass transport, as Alain Bertaud has demonstrated authoritatively.

I have no doubt that if Todd Litman is right that people are coming to prefer higher density living, it should not be a difficult further step to admitting that current regulatory frameworks are at least superfluous. But the situation is worse than that. In urban situations where inner urban land prices are "x" times 10 times 10; there will obviously be a lot less uptake of inner urban residence than in a situation where that land costs "x" times 10.

The former situation is where land inside the urban limit is 10 times the price of farmland outside of it; the latter is where the price at the urban fringe IS the price of farmland. The price at the urban fringe then trends upwards by a factor of around ten to the point where the innermost suburbs are, and then continues upwards exponentially to the center itself. (Which is why this land is used at the highest densities of all).

The above is the simple reason that Houston actually has large numbers of inner city inhabitants of a young age and lower incomes, and Los Angeles only has rich people living in condos.

Manhattan Without Sprawl

"Manhattan would never have come into being without the sprawl surrounding it"

Manhattan did come into being without sprawl surrounding it. One hundred and fifty years ago, it had rowhouse suburbs surrounding it but not sprawl. One hundred years ago, it had streetcar suburbs surrounding it but not sprawl.

Pro-sprawl writers often make the error of calling all suburbs sprawl. Here is the beginning of my review of Bruegmann's book:

Bruegmann makes himself sound like a daring contrarian by saying that sprawl dates back at least to Roman times and is needed to get people out of dense, industrial cities. Actually, he is just playing with words by using "sprawl" to mean "suburb."

The term "suburban sprawl" was invented during the 1950s to describe post-war American suburbs, which were different from earlier suburbs in obvious ways. Sprawl was much lower density than earlier suburbs. Sprawl made it impossible for people to walk, because it was designed with a discontinuous street system (large arterial streets and local streets that are either indirect or cul-de-sacs). Sprawl is designed purely for the benefit of automobiles and ignores the pedestrian; no one wants to walk around a strip mall.

If Bruegmann contrasted sprawl with the streetcar suburbs that were popular in American cities before World War I, it would be obvious that the streetcar suburbs provide all the benefits of sprawl without many of the costs.

Outward growth

I have been thinking of the term "sprawl" (and I think Bruegmann and others regard it this way) as "outwards growth". When I have used the term, this is what I meant. "Allowing sprawl", I mean allowing outwards growth.

I implied in the above comment that this has been an important new insight for me. I still say that urban limits affect land values and this effect is detrimental to many of the densification effects desired by planners. But you could avoid the land value inflation and still have density mandates, as long as you no longer had urban limits. Selling this democratically might be a problem.

Sprawl and Growth

That is a valid point, Charles. But to qualify what I am trying to get at: Manhattan could never have developed like it did had there been limits imposed along the lines of modern-day urban limits at an early stage. The absence of urban limits is a pre-requisite, because land has to remain cheap enough for ongoing redevelopment.

I am trying to establish a model under which distortions in land values do not act as a barrier to the desirable densification that occurs perfectly naturally as a city is allowed to grow. I am inclined to agree that it does not matter in what form the city is allowed to grow, as long as it is allowed to grow.

If there were no urban limits, but "streetcar suburbs" were the mandated form of growth, I believe the negative effects on LAND VALUES would be avoided, and that densification would occur as it naturally does. I am pleased to get your distinction between sprawling suburbs and what you call "streetcar suburbs". Of course streetcar suburbs were not the result of planning restrictions on sprawl, but the result of available transport technology of the day.

The problem we come back to here, is simple demand. If people did still want a traditional sprawled neighbourhood home, what would be the effects of this demand remaining pent-up? It would probably ultimately have political repercussions. You would also have developers attempting to cut deals to get exceptions made and so on. If you couldn't achieve an iron mandate for the type of growth you want, you would be back to distortions and ill-gotten gains occurring.

I still make the proviso that another limit on densification is roads, and that Manhattan could not have come into being without its roading network. And you have granted me a new insight: the "discontinuous street system" (which you associate with "sprawl" type development) would also be inimical to eventual densification; I believe that Glover and Simon's findings incorporate this factor by way of the efficiency of the roading network. I think the "discontinuous street system" is inimical to economic efficiency at every stage, but especially at the "redevelopment" stage years after its original construction.

oops

Yes and no

I think there's probably a middle ground between the "sprawl is eternal" approach and the "sprawl is dead" approach.

It may well be that we are over the social trauma of the late 20th century, when urban cores declined rapidly. In the 1980s and 1990s, some previously declining cities gained population, and the last Census population estimates suggest that this trend accelerated in the 2000s. (Caveat- intercensal estimates, in my opinion, are of limited value in predicting the results of the actual Census).

But that doesn't mean there won't be growth in the suburbs; some suburbs are still pretty desirable (notwithstanding all the publicity given to declining suburbs) and at least in growing regions, cities are unlikely to allow enough housing construction to satisfy all possible demand. Assuming no huge social changes that affect things one way or the other, I suspect American cities may start to look more like, say, Toronto: some continued suburban growth, but also urban growth too.

Blogger

Spawl Is Declining - If We Let It

You raise an important and interesting issue and I agree with your ultimate conclusion -- that a shift from sprawl to more urban development requires reforming our current development policies and zoning codes -- but I think your argument that sprawl will continue as it has in the past is weak.

First, definitions. Yes, you could say that sprawl has not ended. There will continue to be development in suburbs. However, the rate of spawl is declining, as measured in the following ways:
* The ratio of urban to suburban development is shifting. Many cities are now growing faster than their suburbs.
* Demand for large-lot housing is decling while demand for small-lot and multi-family housing is growing.
* Many suburbs are urbanizing, evolving from sprawled bedroom communities into towns and cities with downtowns, and more diverse transportation systems.

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The studies you cite look backward to the period (1950-2000) when sprawl was at its peak. Forward looking studies, which account for changing demographic and economic trends, indicate that a major shift in demand is occuring. Aging population, rising fuel prices, changing consumer preferences regarding urban living (lots of young adults and some older adults now prefer urban over suburban locations) increasing traffic congestion, increasing health and environmental concerns are all shifting demand toward more accessible, multi-modal communities, both within existing urban areas and to more complete suburban communities. For evidence see:

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Much of consumers' preference for spawled locations results from social rather than physical attibutes of large-lot, dispersed, greenfield development. Consumers want large, modern homes in safe, prestegious communities, and they get stuck with big lawns to mow. They would be perfectly happy in smart growth communities that offer these attributes.

Given realistic trade-offs, many households will accept a smaller lot or multi-family housing if this provides improved accessibility, or significant financial savings. If we properly price spawl (with development and utility fees that reflect the higher costs of providing public services to more dispersed locations), and applied least-cost transportation planning (transportation funding was no longer biased toward automobile-oriented improvements over improvements to other modes), more households would rationally choose smart growth locations.

Two decades ago, two-thirds of households preferred large-lot homes. This has declined to half, and is projected to decline to one-third in the next two decades. During the next two decades, many baby boomers will be downsizing, putting numerous large-lot suburban homes on the market. According to analysis by Nelson, and by Pitkin and Meyers, the existing stock of single-family homes is about sufficient to meet projected demand. Smart developers and communities will focus on building smaller-lot and multi-family housing in mixed-use, multi-modal communites - that is the type of housing that will be in short supply.

The best public policy response, which maximizes consumer benefits and minimizes social costs, is to reform zoning codes and development policies to support more compact, multi-modal, infill develpment. It would be great if the Reason Foundation would do more to support these reforms, since they are rational and market-based, and are no-regrets environmental policies (they are justifed on economic efficiency and social equity grounds, and so provide "free" environmental benefits). For specific ideas on how to do that see: